TECHnalysis Research Blog

November 29, 2016
The Magic Inside Your Devices

By Bob O'Donnell

Sometimes, it’s what’s inside that counts more than what we can see on the outside. That’s certainly the case with people, and increasingly, I think, it’s going to be the case with tech devices.

Many of the most impressive breakthroughs in our favorite gadgets are driven almost completely by critical new breakthroughs in component technologies: chips and other semiconductors, displays, sensors, and much more. Just this week, in fact, there were reports that Apple might offer a curved display on next year’s iPhone, and that HP Enterprise had debuted the first working prototype of a dramatically different type of computing device that they dub The Machine.

In both cases, it’s critical component technologies that are enabling these potentially breakthrough end products. In the iPhone’s case, it would be because of bendable OLED displays being produced by companies such as LG Display and Samsung Electronics’ display division. For The Machine, HP’s own new memory and optical interconnect chips are the key enablers for computing performance that’s touted to be as much as 8,000 times faster than today’s offerings.

Long-time tech industry observers know that the real trick to figuring out where product trends are going is to find out what the most important component technologies being developed are, then learn about them and their timeline for introduction. That isn’t always as easy as it sounds, however, because semiconductor and other component technologies can get very complicated, very quickly.

Still, there’s no better way to find out the future of tech products and industry trends than to dive into the component market headfirst. Fortunately, many major tech component vendors are starting to make this easier for non-engineers, because they’ve recognized the importance of telling their stories and explaining the unique value of their products and key technologies.

From companies like Sandisk describing the performance and lifetime benefits of solid state drives (SSDs) inside PCs, to chipmakers like nVidia describing the work in artificial intelligence (AI) that GPUs can achieve, we’re starting to see a lot more public efforts to educate even dedicated consumers, as well as investors and other interested observers, to the benefits of critical component technologies.

Given the increasing maturity and stabilization of many popular tech product categories, I believe we’re going to start seeing an increased emphasis on changes to the “insides” of popular devices. Sure, we’ll eventually see radical outward-facing form factor changes such as smartphones with screens you fold and unfold, but those will only happen once we know that the necessary bendable components can be mass produced.

Of course, the ideas behind what I’m describing aren’t new. Starting in the early 1990s and running for many years, chip maker Intel ran an advertising campaign built around the phrase “Intel Inside” to build brand recognition and value for its CPUs, or central processing units--the hidden “brains” inside many of our popular devices.

The idea was to create what is now commonly called an ingredient brand—a critical component, but not a complete, standalone product. The message Intel was able to deliver (and that still resonates today) is that critical components—even though you typically never see them—can have a big influence on the end device’s quality, just as ingredients in a dish can have a large influence on how it ultimately tastes.

Since then, many other semiconductor chip, component and technology licensing companies (think Dolby for audio or ARM for low-power processors, for example) have done their own variations on this theme to build improved perceptions both of their products and the products that use them. Chip companies like AMD, Qualcomm, and many others, are also working to build stronger and more widely recognized brands that are associated with important, but understandable technology benefits.

Most consumers will never buy products directly from these and other major component companies. However, as tech product cycles lengthen and industry maturity leads to slower changes in basic device shapes and sizes, consumers will start to base more of their final product purchase decisions on the ingredients from which those products are made.

Here's a link to the column: https://techpinions.com/the-magic-inside-your-devices/48116

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.